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TMI Blog2001 (1) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... g rupee draft from banks in Kuala Lumpur. As the gift drafts were purchased in Kuala Lumpur and given to the mother of the assessee in India, exemption was claimed in respect of these gifts under section 5(1)(ii) of the Gift-tax Act, 1958. The Gift-tax Officer denied the exemption claimed. But, on appeal, the Appellate Assistant Commissioner of Income-tax accepted the assessee's contention that the gifts were complete as soon as the foreign money was deposited with the foreign bank with the intention of donating it to the donee in India and that under the Foreign Exchange Regulation, he had no other option but to make the gift through banking channels by entrusing the foreign money to the bank and instructing it to remit it to the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessee purchased the draft thereafter. The assessee, therefore, contended that the gifts were movable properties situated in a foreign country and the assessee being not ordinarily a resident, was entitled to exemption under section 5(1)(ii) of the Gift-tax Act, 1958. On an earlier occasion, this court in the case of CGT v. S. Raja Ramalingam [1997] 227 ITR 622, had considered whether there was a request made by the donee to the donor in a foreign country to send the gift by draft and by post. This court, in the absence of any request by the donee to the donor to send the draft by post, came to the conclusion that the gift was complete in India where the donee accepted the gift as the donor posted the draft without the express re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the banker and the customer and the location of the debt at the time of acceptance of the gifts, the assessee is entitled to the exemption as provided under section 5(1)(ii) of the Act." In the instant case, the gifts were made by the donor at Malaysia and the assessee is a citizen of Malaysia and a non-resident and the said gifts have got to be considered as the movable properties sent to the donee in India through the banker and the relationship between the bank and the donor is one of a contract and the bank under the terms of a contract was obliged to pay the money and it is not necessary for the donee to go to the foreign country for the encashment of the draft and it is open to them to encash the same by placing the same at a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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